Ameritox Alleges Destruction of Evidence by Top Millennium Executives
The ongoing dispute between Ameritox, a drug testing laboratory in Baltimore, and San Diego-based rival Millennium Laboratories is continuing to heat up. In a motion for sanctions and incorporated memorandum of law filed on Nov. 26, Ameritox alleges that top executives at Millennium directed employees to destroy evidence, delete e-mails, and improperly redact documents in […]
The ongoing dispute between Ameritox, a drug testing laboratory in Baltimore, and San Diego-based rival Millennium Laboratories is continuing to heat up. In a motion for sanctions and incorporated memorandum of law filed on Nov. 26, Ameritox alleges that top executives at Millennium directed employees to destroy evidence, delete e-mails, and improperly redact documents in an attempt to hide information harmful to its case. Ameritox is seeking terminating sanctions against Millennium in the form of an order from the court finding that liability has been established on all of Ameritox’s claims. Ameritox is also seeking the appointment of a “special master” paid for by Millennium, who will investigate the extent of Millennium’s deletion and destruction of evidence and redacted documents, attorneys’ fees, and cost associated with investigating the missing evidence and bringing this motion to the court and whatever other relief the court deems just and proper. Millennium and Ameritox have been embroiled in a lawsuit filed by Ameritox in 2011 alleging that Millennium engaged in false advertising, violations of the physician self-referral laws (Stark) and anti-kickback laws, and performance of unnecessary testing, among a variety of other questionable practices. This motion alleging criminal activity may be the most significant motion in the case because it could lead to personal criminal liability for some of the top executives at the company. Ameritox says it found the incriminating documents in an unrelated third-party production of documents made by a former employee who was responding to a Millennium subpoena. Ameritox alleges that the president of the company, Howard Appel, and the executive vice president of sales, Elizabeth Peacock, directed employees to perform the alleged illegal activities. Ameritox says Appel instructed employees not to send any e-mails longer than two sentences after expressing frustration that employees were still generating documents harmful to Millennium’s case, which resulted in employees using text messages to communicate with each other. Ameritox describes a request to the sales force by Peacock to submit ideas for ways to increase sales. The project was known as the 4600 project. The project generated over 100 e-mails, some of which suggested illegal business practices. Later, Peacock sent an e-mail ordering all of the salespeople to delete every e-mail related to the 4600 project and to call her if they couldn’t “figure out why.” If the allegations made by Ameritox prove true, or are judged by the court to be true, and are of sufficient severity to warrant the sanctions Ameritox is requesting, some of the employees may find themselves in court also accused of obstructing justice or destroying evidence in a legal case. It is difficult to understand why an employee would participate in this kind of activity when the personal risks are so severe. Takeaway: The dispute between Ameritox and Millennium highlights the consequences to employees of potentially engaging in questionable activity. If employees find themselves being asked to do something they believe to be improper or illegal, they should not do it and should report the incident to an appropriate internal or external person or entity.